After restating their financial statements, companies may voluntarily restate their previously issued internal control (IC) reports for the financial statement (FS) misstatement periods, changing them from “effective” to “ineffective.” This paper examines the determinants and consequences of IC restatements, which have been of concern to financial statement users. When announcing these IC restatements, companies often provide a detailed explanation of the IC problems and a discussion of their plans to remediate these problems. We find that companies with less severe IC problems that can be remediated more quickly are more likely to restate their IC reports. Moreover, these results are driven by companies with a higher need for external financing, suggesting that IC restaters voluntarily restate their IC reports in order to inform investors about their less severe IC material weaknesses and their plans to improve IC quality. Finally, we find that, relative to other FS restatement companies, IC restaters have a lower likelihood of CFO turnover and auditor resignation following the FS restatement. Taken together, our results suggest that voluntary IC restatements are used by IC restaters as a means to separate themselves from other FS restatement companies with more severe control problems and slower remediation plans. Our findings also indicate that studies investigating IC quality and related disclosures need to distinguish between IC restaters and other FS restatement companies because of the different characteristics and consequences between the two groups.

This paper examines the association between CEOs' prosocial tendency and their firms' likelihood of accounting manipulation. We measure CEOs' prosocial tendency based on their involvement with charitable organizations. We find that prosocial CEOs are less likely to engage in accounting manipulation, as proxied by material non‐reliance restatements and SEC or US Department of Justice enforcement actions. The effect is more pronounced when CEOs are involved with charities that directly aim to improve the welfare of others and when they face stronger incentives to misreport. These results continue to hold in analyses of changes in CEOs' prosocial tendency around turnover events. Taken together, our findings suggest that CEOs' prosocial tendency, a fundamental personal trait, plays a significant role in shaping the quality of accounting information.

This paper studies voluntary disclosures that firms have suspended, resumed, or completed their open market repurchase programs. Voluntary disclosures of repurchase status updates are common and value‐relevant. They also inform subsequent repurchase activities: voluntary disclosers are more likely to complete their repurchase programs and to initiate new repurchase programs than firms with undisclosed repurchase status changes. Moreover, firms that disclose repurchase suspensions experience larger returns to subsequent repurchase authorizations, consistent with a reward for establishing a reputation for transparency via voluntary bad news disclosure. Finally, exploiting a change in repurchase reporting requirements, we document that voluntary updates are less frequent when mandatory disclosure increases. An important exception, however, is when macroeconomic uncertainty is high, such as during the Great Recession and the COVID‐19 pandemic.

We provide a list of points to consider ( PTC s) to help researchers self‐assess whether they have addressed certain common issues that arise frequently in accounting research seminars and in reviewers’ and editors’ comments on papers submitted to journals. Anticipating and addressing such issues can help accounting researchers, especially doctoral students and junior faculty members, convert an initial empirical accounting research idea into a thoughtful and carefully designed study. Doing this also allows outside readers to provide more beneficial feedback rather than commenting on the common issues that could have been dealt with in advance. The list, provided in the appendix, consists of five sections: Research Question; Theory; Contribution; Research Design and Analysis; and Interpretation of Results and Conclusions. In each section, we include critical items that readers, journal referees, and seminar participants are likely to raise and offer suggestions for how to address them. The text elaborates on some of the more challenging items, such as how to increase a study's contribution, and provides examples of how such issues have been effectively addressed in previous accounting studies.